Forecast
Calculator
“By failing to prepare, you are preparing to fail.”
Benjamin Franklin.
Let me share with you some- First, the forecast calculator.
One exercise we undertake within the Home Build Mentoring Foundation program is calculating a ballpark cost for construction- All before we begin designing. It’s quite the challenge, as you can imagine!
For new homes, I use this classic equation
For renovations and additions:
I’ve developed a complex calculator which indexes a M2 rate to inform the allowances for demolition, alterations, additions, plus high-cost areas.
Both calculations require the input of a reference m2 rate.
It’s best practice to reference M2 rates from actual projects where possible rather than generic tabling. To enable the referencing of projects from previous years, I have applied the output rate of quarterly changes as determined by the Australian Bureau of Statistics (ABS) for ‘House Construction Australia’ relative to the quarter and year of project pricing. I haven’t chosen the data from ABS lightly. I became comfortable with its reflectiveness of industry conditions only after extensive research and comparison between various data services.
This ABS forecasting system has become a wonderful reference tool, now configured into a Forecast Calculator. A calculator I would like to share with you to enable greater reference to your past project library.
When factoring in the incremental price rises experienced in recent years, your project cost and M2 rate can be referenced once again.
Forecast Calculator.
Note:
The calculator is provided as a helpful tool and should be used in conjunction with professional judgement and experience.
Is the calculator and forecast perfect?
No. It’s a bit like when a forensic artist uses age progression technology to predict what a missing child will look like years after their disappearance. Too many variables are at play to be entirely accurate- The child may have changed in body mass, hair style or hair colour. So, while it isn’t perfect, it is a damn sight closer than referencing an image of a toddler who would now be a young adult.
Project forecasting benefits.
For Designers.
EDUCATING CLIENTS- Homeowners’ expectations of build costs typically fall well short of actuality. Expressing similar past projects as a cost comparison will help inform and build healthy expectations early.
FEASIBILITY + ESTIMATION- Reference M2 Rates for Gross Floor Area (GFA) assist in feasibility and estimation in the earliest design and development stages, where opportunities for estimating are limited.
For Builders.
DESIGNER KNOWLEDGE- Sharing applicable M2 rates with relative designers helps bring everyone on the same page early and will go a long way to preventing future project budget blowouts.
PRE-COST BALLPARK-ING- Lean on your forecast M2 rates to ballpark the approximate price range before committing to detailed project costing. Confirm the range aligns with clients’ expectations- If grossly over, the project will unlikely convert to a building contract.
